HERMES_REGISTRATION_DOCUMENT_2017

CORPORATE GOVERNANCE

SUPERVISORY BOARD’S REPORT ON CORPORATE GOVERNANCE

CAPITAL STRUCTURE AND FACTORS LIABLE TO AFFECT THE OUTCOME OF A PUBLIC OFFERING

In the event that a legal or internal threshold is crossed (Article L. 233-7 of the French Commercial Code and Article L. 433-3 et seq. of the French Monetary and Financial Code – Article 11 of the Articles of Association, see page 286) with regard to equity or voting rights, a declaration under the conditions set out above must be made accordingly, failing which the shareholder will be deprived of the right to vote at General Meetings.

3.1.7

Information on equity and shareholding is presented on page 294. As a société en commandite par action Hermès International is governed by certain provisions specific to its legal form, stipulated by law or the Articles of Association, which are liable to have an effect in case of a public offering, namely: s the Executive Chairmen may only be appointed or dismissed by the Active Partner; s Émile Hermès SARL, the Active Partner, must retain in its Articles of Association certain provisions concerning its legal form, corporate purpose and the conditions to be met to qualify as a partner (see Article 14.3 of the Articles of Association of Hermès International on page 287); s Hermès International may be converted into a société anonyme (public limited company) only with the consent of the Active Partner; s except for decisions falling within their exclusive remit, no decision taken by the Limited Partners (shareholders) at General Meetings is legitimate unless approved by the Active Partner no later than the end of the meeting. Hermès International’s Articles of Association also contain stipulations that are liable to have an impact on the outcome of a public offering, namely: • voting rights are exercised by the bare owners at all General Meetings except for decisions regarding the allocation of earnings in which case the usufructuary shall exercise the voting rights, • double voting rights are allocated to each registered share for a period of four consecutive years, • any shareholder who comes to hold 0.5%of the share capital and/ or voting rights, or any multiple of that percentage, must disclose this fact (Article 11 of the Articles of Association). Furthermore, a priority right to acquire Hermès International shares, granted by the members of the Hermès family group and descendants of these members to H51, is explained on page 309. Lastly, the Executive Management has a grant of authority to carry out capital increases.

APPENDICES

3.1.9

Rules of procedure of the Supervisory Board

3.1.9.1

In force since 18 March 2009 – Version n° 9 amended 26 January 2018 Purpose

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These rules of proceduredefine the terms and conditions of the structure and workings of the Supervisory Board of Hermès International (herei- nafter the “Board”) and its Committees and supplement the provisions set out in applicable laws and the Articles of Association (an extract of the Articles of Association is attached to this report). Their purpose is to enhance the quality of the Board’s work by promoting the application of good corporate governance principles and best prac- tices, in the interests of ethics and greater effectiveness. 1. Supervisory Board 1.1 Composition of the Board 1.1.1 Ownership of a minimum number of the Company’s shares by members of the Board All Board members must own 200 Hermès International registered shares during the year in which they are appointed. The directors’ fees they receive may assist in this acquisition. This obligation does not apply to the Employee Representative Board members. 1.1.2 Independence of Board members Members of the Board are independent if they have no relationship of any kind whatsoever with the Company, its group or its management that is liable to compromise the exercise of their freedom of judgement in any way. 1.1.2.1 Independence criteria Independence criteria applicable to Board members are as follows: s they may not be a partner or amember of the ExecutiveManagement Board of Émile Hermès SARL (Active Partner); s they must comply with the criteria set out in Article 8.5 of the AFEP- MEDEF Corporate Governance Code of November 2016. 1.1.2.2 Procedure for qualifying members as independent The qualification of a Board member as independent is discussed each year by the Compensation, Appointments and Governance Committee, which draws up a report on this matter and submits it to the Board. Each year, in the light of this report, the Board reviews the situation of each member to determine whether they qualify as an “independent director”. The Board is required to report the findings of its review to the sharehol- ders in the annual report. 1.1.2.3 Proportion of independent members on the Board At least one-third of theBoardmembersmust be independent members. Employee Representative Board members are not included in the calcu- lation of this proportion.

SPECIAL TERMS AND CONDITIONS FOR ATTENDING GENERAL MEETINGS

3.1.8

General Meetings are convened as provided for by law and Article 24 of the Articles of Association (see page 391). Double voting rights are allocated under the conditions set out in Article 12 of the Articles of Association (see page 286).

2017 REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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